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Monday, August 13, 2012

Fair Work Australia's monumental rebuff to the Transport Workers Union in its dispute with Qantas strikes a blow to the credibility of claims the Fair Work Act is some kind of conspiracy against employers.

The commission (which is what Fair Work Australia is in all but name) had no choice last week but to support Qantas management because, in both its tactics and its demands, the union was being so bloody-minded.

That's true even though, by grounding its planes worldwide and locking out all its staff last October, Qantas management could come up with no more creative solution to its bargaining problem than to be as bloody-minded as some of its unions.

This was not so much a win for "managers' right to manage" as the commission's commonsense judgment that all the industrial parties needed to face up to the harsh commercial realities threatening the survival of their business.

Here we had a union demanding 5 per cent annual pay rises at the same time it was fighting to prevent its employer from turning to cheaper sources of labour. That makes sense? These guys needed their heads examined.

Qantas's long-running disputes with three of its unions represent the only times Fair Work Australia has agreed to impose arbitrated resolutions so far in its brief existence. Remembering the way the old arbitration system had degenerated by the time we abandoned it in the mid-1990s, it's been vitally important to limit use of compulsory arbitration to cases of the greatest intransigence.

The whole point of the move from the centralised system to bargaining at the enterprise level was to get employers and unions dealing with each other face-to-face and responding their workplace's particular circumstances, rather than the old game of unions pulling on a strike to oblige the referee to intervene and impose a compromise.

It will be a pity if the commission's refusal last week to split the difference in the old way encourages other militant employers to seek to resolve disagreements with their workers the chaos-causing Qantas way.

Even so, the commission's refusal to go anywhere near splitting the difference provides powerful evidence it can be trusted to adjudicate issues sensibly in a system that hasn't swung the balance too far the unions' way.

Perhaps this explains why the national dailies - which, in their campaigning against the evils of Fair Work, seem to find another story about union atrocities for the front page most days - weren't greatly excited by the employers' big win last week.

The trouble with two such influential organs distorting their reporting of industrial relations so persistently and to such an extent is that between them, they can leave the public with a grossly exaggerated impression of the extent of union misbehaviour and the deleterious effect of Fair Work.

Read too much of that stuff and you come away thinking the union movement has risen from its deathbed to pose the greatest threat to our continued prosperity. Remember, union membership is down to 18 per cent of the workforce (from 50 per cent in 1982) and 14 per cent of private sector workers.

Another figure to keep in mind next time you read about the union monster poised to eat the economy's lunch: more than 80 per cent of enterprises don't have a union presence.

Two labour lawyers, Dr Anthony Forsyth, of Monash University, and Professor Andrew Stewart, of Adelaide University, note in their submission to the Fair Work review that "the concerns about union activities that so animate certain employers in the resources, manufacturing and construction sectors are very far removed from the issues confronting businesses in other parts of the economy".

"For the small to medium enterprises that predominate in sectors such as retail and hospitality, both unions and indeed collective bargaining are largely absent. Their concerns are much more likely, in our experience, to revolve around the costs and 'inflexibilities' imposed by the award system, and the renewed exposure to unfair dismissal claims that the Fair Work Act has brought."

So far, Fair Work has failed in its aim to greatly increase the extent of collective bargaining, with the proportion of employees covered by collective agreements increasing from 39.8 per cent of the workforce in 2008, to just 43.4 per cent in 2010.

Forsyth and Stewart argue many of these new agreements are effectively non-union instruments drafted by employers to replace the individual workplace agreements formerly available under Work Choices.

"Such agreements may be presented as 'collective', and they do require the endorsement of a majority of employees to be registered under the Fair Work Act - but only rarely are they the product of anything that could be said to resemble a bargaining process," they say.

Genuine collective bargaining is likely to be confined mainly to large, unionised workplaces in the public sector and to some sections of the private sector.

Much of the bitter complaint about Fair Work comes from the miners. Forsyth and Stewart say what some employers in the resources sector are seeking is a capacity to manage their businesses without the involvement of unions, and to undertake projects entirely free of any threat of industrial action.

"These aspirations are simply not compatible with the principle of freedom of association ... Indeed, to allow them to be fully realised would involve restrictions on the taking of industrial action, or on union rights of entry, that would go far beyond anything envisaged by the Howard government, even during the Work Choices period," they say.

Talk of Fair Work having unnecessarily bolstered "union power" should not only be kept in proportion, but also understood in the context of a broader ideological agenda that is profoundly antithetical to the principle of collectivism, they conclude.